Bitcoin Tops $121K as Short Squeeze Potential Grows; Memecoins Plummet
Bitcoin's value rose to over $121,000, recovering from lows under $120,000. Privacy coins like ZEC and DASH also saw sharp gains. Traders on decentralized exchanges showed a bullish preference for higher strike BTC and ETH calls.
Derivatives Positioning
- Coinglass data indicates potential liquidation of BTC perpetual short positions above $121,600, possibly triggering a short squeeze towards record highs.
- The market is resetting leverage, with volatility clearing excess positions. Global BTC futures market positioning remains high, with open interest near 755K BTC.
- Futures open interest dropped for BNB, XRP, ADA, and TRX, suggesting capital outflows. Meanwhile, BTC's open interest increased by 1%, and ETH by 0.4%.
- XMR shows overheating signs with annualized funding rates nearing 60%, indicating strong demand for bullish bets.
- On decentralized exchange Derive, options activity shows bullish bias with open interest in calls at $128K and $145K strikes for BTC; ETH options also bullish at $5K and $6K strikes.
- Deribit reflects a slight negative call-put skew for BTC and ETH, indicating a bias for protective puts. Paradigm block flows featured ETH puts and straddles.
Token Talk
- A recent Chinese memecoin frenzy led to significant gains for tokens like GIGGLE but quickly collapsed, with many assets losing over 95% of their value within 24 hours.
- The downturn coincided with a broader memecoin market decline, described by Binance founder CZ as a “blood bath,” driven by FUD and false rumors about token listings.
- This collapse followed Binance's "Meme Rush" platform launch, intended to provide a structured path before token trading.
- Similar declines were observed in Solana memecoins previously, suggesting a pattern for BNB Chain memes.
- Pancake Swap's trading volume remained inflated at $18 billion, though liquidity was low, with WBNB having only $35 million in liquidity compared to its fully diluted valuation of $1.6 billion.